Understanding the Dispute Process
When proposing, you must submit an accurate answer. In contrast, when disputing, no answer is required. You simply click Dispute, and UMA stakeholders will vote to determine the correct resolution.
If the proposed answer is found to be incorrect for any reason, the dispute succeeds and the disputer wins the bond.
This creates an imbalanced risk-reward dynamic:
Proposers must be completely accurate and align with all criteria and precedents. They stake a $750 bond to earn a $5 reward, plus $250 if the proposal is disputed but ultimately upheld.
Disputers only need to identify a single flaw to succeed. They stake a $750 bond and receive a $250 reward if the dispute is successful. Statistically, disputers tend to be more experienced and knowledgeable than proposers.
Submitting Proof of Evidence
When proposing, there is no option to attach evidence in your proposal onchain. Submitted answers are expected to be accurate, but you can discuss your evidence on the UMA Discord. The market price can also indicate whether shareholders believe a market has been resolved.
Precedents and Implicit Rules
Even if a market seems resolved according to its description, there are often implicit rules or precedents not written in the market.
A typical resolution criteria might state:
This market will resolve to the temperature range that contains the highest temperature recorded at the LaGuardia Airport Station in degrees Fahrenheit on February 28, 2025. Any revisions to temperatures recorded after data is finalized for this market's timeframe will not be considered for this market's resolution.
You might think it's safe to propose at 12:01 AM on March 1, but if the temperature data has not yet been published and finalized, your proposal is considered too early and will likely be disputed. The correct approach is to wait for the next data point after 12:00 AM on March 1 to be published and finalized.
Many first-time proposers are unaware of these rules. While the market description may seem clear, experience and precedent often reveal otherwise.
The Most Common Dispute Reason
The most common reason for a dispute is P4 (Too Early).
P4 Examples
Sports Games: Proposing a winner before the game officially concludes or results are confirmed. A post-game review may change the outcome.
"No" Before Deadline: In a market like Will the US confirm that aliens exist in 2025?, proposing No before December 31, 2025, 11:59 PM ET will be disputed, as the deadline has not passed.
Before Resolution Criteria Is Met: In markets such as Will the US leave NATO by June 30?, proposing Yes without official confirmation from both the US government and NATO, even if media reports exist, will result in a dispute.
This is why some markets remain unresolved for weeks or months after an event: the criteria simply have not been met yet. Additionally, some markets may remain unproposed for a period of time even after an initial event appears to have resolved the market, in order to lower the risk of being disputed.
The Four Main Reasons for Disputes
Most disputes fall into one of these categories:
P4 (Too Early) Example: Proposing before data or official confirmation is available.
Ambiguous Market Example: Did Kanye sell his Twitter account? relies on unclear or conflicting sources.
Contentious Interpretation Example: In Gold missing from Fort Knox?, whether a monthly report qualifies as an audit is debatable.
Mistake Example: Proposing the wrong sports winner due to bot or human error, or misinterpreting an event.
Caveats and Observations
Most disputers tend to be more experienced than proposers.
While the overall dispute rate is low, most disputed proposals are resolved in favor of the disputer.
The majority of disputed proposals come from first-time proposers.
In general, disputing offers a more favorable expected value (EV) than proposing.
What's Next
Congratulations. You have learned the essentials of the proposal, dispute, and resolution process. You can now move on to Precedents or Case Studies to see how these concepts are applied in real markets.
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